Today's Report (11/16/2021)

The trend in housing starts was 264,264 units in October, down from 270,661 units in September, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

The standalone monthly SAAR of housing starts for all areas in Canada was 236,554 units in October, a decrease of 5.3% from 249,922 units in September. The SAAR of urban starts decreased by 3.7% in October to 214,797 units. Multiple urban starts decreased by 5.3% to 156,781 units in October, while single-detached urban starts increased by 1% to 58,016 units.

What it is

It records the number of new homes being built, in the preceding month. SAAR (seasonally adjusted annual rate). The report will show last month’s data. For example, the release comes out in Feb, but will represent data for Jan.

What Are The Fundamental Effects

This is a leading indicator of economic health. A sharp drop-off in home construction is a tale-tale sign that the broad economy is on the verge of slowing, whilst a rebound in housing starts, and home buying sets the stage for a pickup in overall business activity.

How Does It Affect The Markets

CURRENCY - A strong housing report is considered bullish for the Canadian Dollar because it usually supports a scenario of higher corporate profits and firming of interest rates. Weak housing data can cause the value of the dollar to slip.

STOCKS - Prolonged weakness in housing starts can alarm stock investors since it acts as a precursor to a broader downturn in the economy. If housing activity is vibrant and inflation remains contained, it can be viewed as a positive sign.

BONDS - A healthy pickup depicts an economy that is robust and where inflation pressures are likely to accelerate. That can knock down bond prices and cause yields to rise.